Moody's has downgraded two of Schroder's Special Situation Dynamic Reserve funds following their inv...
Moody's has downgraded two of Schroder's Special Situation Dynamic Reserve funds following their investment in securities below investment grade BAA1.
Moody's expects both the dollar and euro versions to continue to invest in these securities, a policy which, although allowed by the funds' prospectuses, is not consistent with a fund credit rating of AAA. According to Moody's, this strategic change has grown across the portfolio since its inception.
David Harris co-manages both funds with Steven Lear. The dollar fund was launched in 2002, while the euro version began in 2003.
Harris said: "Part of the strategy has been to find structured instruments such as asset-backed securities, which may start off with low investment grade ratings but credit quality improves as people back them. This constitutes around 5% of the portfolio."
However, Moody's points out the ratings are not intended to consider the prospective performance of a fund with respect to appreciation, volatility of net asset value or yield.
Joined as head of strategy, multi asset, in June
Group income protection
Nine in 10 do not have income protection
Set to become part of Single Financial Guidance Body